Sports Facility Financing – How Do You Raise The Money?

Sports facility financing is one of the most challenging aspects of the start-up process. If you are not self financing your sports facility you have to look elsewhere to get the money. But, how do you go about finding the right people and convincing them that you are the right person and this is the best place to put their money? You generally have three options in finding your money.

The first is the most traditional, and that is through the commercial banking system. This approach will require a high level of documentation and planning. You can expect to be required to disclose an in depth history of your financial history and past business experiences. Banks have protocols and regulations to follow, and remember the person you are dealing with is probably a disinterested third party. They will also probably require a substantial guarantee to back up any money they give. Banks tend to be a better option once you have opened your doors and have some history behind you, but convincing them up front before the foundation is poured can be a daunting task.

Finding a private investor is your second option. Finding someone who has a passion for what your are trying to accomplish is the key. Someone who can see what your vision is and has the money to do it is who you are looking for. The planning and numbers will still have to make sense but when you have someone on your side and emotionally invested in what you are doing, they are more likely to overlook some minor details that banks would never let go. This is not to say you are hiding information or blowing smoke, but that you have someone who believes in what you are doing and has a strong interest in seeing it succeed. Banks do not have the luxury of such an approach.

There is no getting around this part though, choosing to go the private financing rout requires a lot of door knocking and rejection. Concentrate on people who have strong connections to whatever sports you are offering. Current or former professional players, current or former professional coaches, or parents with kids who participate and have the means. These are all excellent candidates. You may even need to recruit two or three people to raise what you need to get going.

The third way to go is through a real estate partnership with a building owner or developer. Your biggest financial hurdle is securing a facility. I have been involved with businesses where an owner made a deal with a developer to finance and build the building to suit and the owner only needed to come up with the capital to buy the equipment and and fund the operations. That’s a big help in getting a facility open, although you do not retain control over the facility.

You can use a combination of these three methods as well, in fact many people do just that. Whatever method you use, you first need a solid plan to show prospective investors. That’s where it all starts, banks demand it and private investors need to know you are a competent business person. We can help make this most important part of the process easy to accomplish with our Sports Facility Business Plan Manual.